Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

7. Receivables and Investments

Introduction to Investments in Securities

Financial Accounting

7. Receivables and Investments

Introduction to Investments in Securities

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Multiple Choice

An investment with a stable and predictable history will most likely have:

High risk and high expected return

High risk and low expected return

Low risk and high expected return

Low risk and low expected return

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Verified step by step guidance

Understand the relationship between risk and return: In financial accounting and investment theory, there is a direct relationship between risk and return. Higher risk is typically associated with the potential for higher returns, while lower risk is associated with lower returns.

Analyze the characteristics of a stable and predictable investment: A stable and predictable investment implies that it has minimal fluctuations in value and is less likely to experience significant losses or gains. This aligns with the concept of low risk.

Evaluate the expected return for low-risk investments: Since low-risk investments are less volatile and safer, they generally offer lower returns compared to high-risk investments. This is because investors are compensated for taking on additional risk with the potential for higher returns.

Eliminate incorrect options: High risk and high expected return, high risk and low expected return, and low risk and high expected return do not align with the characteristics of a stable and predictable investment. These options either involve high risk or an unrealistic expectation of high returns for low-risk investments.

Conclude that the correct answer is 'Low risk and low expected return,' as it accurately reflects the nature of a stable and predictable investment.